Amazon in 2012 and 2013

Posted on 13th Jun 2013 @ 1:01 AM

                                                                                   Amazon in 2012 and 2013

Internet giant Amazon announced higher than expected profit for the fourth quarter of 2012, the shares shot up 9% to a record high of 284 dollars per share in trading on Tuesday evening. Operating profit increased by 56% to $ 405 million in the fourth quarter of last year. During the same period of 2011 it was $ 260 million. Net income, however, decreased by 45% to 97 million, and although sales increased by 22% from 17.43 billion dollars of 21.27 billion dollars in the fourth quarter a year earlier.

From Amazon announced that good results are reinforced by business growth with high profitability during the holidays. These are sectors in which the company invests aggressively in recent months include - providing "cloud services", the sale of video content and e-books. The largest online retailer invests in building a strong network of stores especially in the U.S. Thus Amazon can provide consumer products available within two days. In addition, they allow the company to reduce its cost of delivery. CEO of Amazon Jeff Bezos emphasized the success of the business of electronic books. According to him, this is a multi-segment and the company reported an increase of 70% in 2012 In comparison, the online retailer has reported a sales increase of only 5% of traditional paper books.

Amazon's profit declined in recent years because of the investments that the company made to stimulate business growth in the long run. Key actions in this area are - the construction of logistics centers for product storage, the development of mobile devices such as tablets and e-readers and the imposition of various Internet services. Most investment company focused in the development of logistics centers that are closer to consumers. The main objective is to reduce transport costs in the fourth quarter; the strategy is showing signs of success. Net delivery costs constitute about 4.5% of those sales, a decline from the same period the previous year, when they were 5.4%. Amazon also invested considerably in the production of hardware (readers and Kindle tablet Kindle Fire), and in building a stable online shop content. Through them, the company enters into direct confrontation with Apple.

Amazon announced its expectations for the first quarter of 2013 the new company expects net sales of between 15 and 16.6 billion or growth of between 14 and 26% compared to the same period last year. Operating profit is estimated by $ 65 million to a loss of 285 million dollars. The large range is due to the fact that the company's business may be affected by many factors such as differences in currency exchange rates, changes in global economic conditions and consumption in the world, changing the growth of online commerce and many others, emphasized by Amazon.